Industry minimum pay rates up for review

THE minimum rates of pay in industries employing up to half a million people look set to be cut after the Government ordered a review of the mechanisms which set the rates.

The Department of Enterprise yesterday announced that it was pressing ahead with a six-week review of Employment Regulation Orders and Registered Employment Agreements, which govern pay and conditions in industries such as retail, hospitality and construction.

The review by Labour Court chairman Kevin Duffy and UCD economics lecturer Frank Walsh should be wrapped up by mid-April.

While her department stressed the review team was being given free rein to reach its own conclusions, newly appointed Enterprise Minister Mary Hanafin’s announcement was reminiscent of terminology used to justify the €1 cut in the minimum wage.

“We need to ensure that statutory, wage-fixing mechanisms work effectively and efficiently and that they do not have a negative impact on economic performance and employment levels,” she said.

Another indication of the Government’s thinking is its inclusion of the review in the EU/IMF programme for Ireland — where the measure was coupled with the reduction in the minimum wage.

Both employers and trade union representatives welcomed the review, albeit for very different reasons.

Employers’ bodies such as IBEC, the Small Firms Association and ISME all saw the move as an opportunity to cut restrictive wage minimums which employers could no longer afford.

“The current system is at odds with the economic needs of the country,” said IBEC director Brendan McGinty. “Current wage rules are putting viable businesses in jeopardy. The legal basic rate for an entry grade worker is 33% higher in the case of hotel staff and 39% higher in the case of contract cleaning, when compared to Northern Ireland.”

The Irish Congress of Trade Unions also welcomed the review but only because it said it would offer “a real opportunity to refute the ideological attack on incomes that was launched by the outgoing Government”.

David Begg said the last administration had made an attack on lower and middle incomes a policy priority and the results had been disastrous.

He questioned the involvement of EU institutions in the process, saying EU treaty law forbade their involvement in wage setting at national levels.

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